Costs of Food Safety

Leafy Greens Food Safety Cost Study Final Report

Background: California Leafy Greens Marketing Agreement

In 2007, the Leafy Greens Product Handler Marketing Agreement (LGMA) was established in California in response to E. coli outbreak related to spinach growers in the state. The LGMA is a set of food safety practices relating to growing, harvesting, packing and shipping leafy greens that signatories agree to follow. Membership requires verification of compliance through government audit process. According to the LGMA website, over 100 farmers, shippers and processors in California are signatories to the agreement, representing 99% of total volume of greens sold in the state. Shippers and processors who sign the agreement are required to purchase product from farmers who comply with the accepted set of food safety practices.

Grocery stores and restaurants that purchase California leafy greens products help enforce the LGMA by only purchasing product from LGMA certified member companies. LGMA member companies in good standing use a Service Mark that identifies them as LGMA members. There is currently no LGMA mark on consumer packaging. All LGMA members in good standing are also listed on the members section of the LGMA website. (http://www.caleafygreens.ca.gov).

Hardesty et al (2009) estimated the cost of compliance regulations for leafy greens farmers who are signatories to the California LGMA. The team surveyed growers during 2008 and 2009 and found that grower’s safety costs (modification costs plus seasonal food safety costs) nearly doubled after the implementation of the LGMA, increasing from a mean of $24.04 per acre in 2006 to $54.63 in 2007. Importantly, the report concluded that growers with the highest annual revenues, those with over $10 million dollars, benefit from significant economies of scale and have the greatest ability to absorb these costs.

While the LGMA is expensive for these California growers to implement, it is hypothesized that these best practices may even more costly to implement for small acreage vegetable farms in Minnesota. Minnesota’s farmers are smaller in terms of acreage and gross sales than those in California. According to the data that informed the NLGMA in California, a “small farm” is defined as a farm with annual gross revenue from leafy greens of < $1 million. In Minnesota, more than 80% of fresh market vegetable growers farm on 30 acres or less, and gross less than $150,000. Large California farms have greater cash flow, economies of scale, employees to dedicate to Food Safety, and mechanization to reduce the per/acre cost of implementing the practices required by a LGMA.

Cost of GAPs practices in Minnesota

In Minnesota, little research has documented either the extent of adoption of food safety practices or the cost associated with adoption of these practices. One study, funded by the University of Minnesota Healthy Foods Healthy Lives Institute, documented current food safety practices in Minnesota by small and mid-size vegetable operations (Tong et al, forthcoming). This study used farm visits and paper surveys to determine the extent of adoption of food safety practices on fresh vegetables farms in Minnesota. Based on survey responses (N=246) and 27 follow-up on-farm farm visits, this study concludes that growers are lagging in key areas of GAPs, such as the use of single-use hand towels, treating wash and processing water, taking measures to keep animals out of production fields, and cleaning and disinfecting harvesting tools on a scheduled basis.

2) determine which food safety practices would give growers the biggest “bang for their money” and make the most sense to implement given the economics of small vegetable farming.

Methodology

Data was collected via in-person and telephone interviews with farmers in 2011-2012. Farmers chosen for the study had successfully implemented at least some on-farm food safety practices on their farm, or had undergone a 3rd party GAP food safety audit. Particular attention was paid to growers of foods that pose the greatest food safety risk, including leafy greens, melons, tomatoes and fresh herbs. We spoke to both organic and conventional growers, both near the Twin Cities metro and farther away, and both Caucasian and Hmong. Farm visits and interviews were about 2-3 hours on average.

At each interview, farmers were given a list of suggested best practices and were asked to estimate the cost of implementing these practices on their farm. Estimates were based on the farmer’s past experience, or in some cases, estimations of future plans. Some purchases, such as the cost of yearly Port-a-Potty rental could be determined from written records, and are not reliant on farmer’s estimates.

Cost estimates were averaged from multiple grower’s responses. Costs were also gathered, in some instances, from additional research where costs are readily publicly available. For example, the cost of renting a portable toilet, the cost of paper towels, the cost of sanitizer for rinse water are all publicly available from companies who provide these items. In cases where there were multiple companies offering a good or service, costs were compiled and averaged.

We also spoke in more informal settings (at meetings or on the phone) with 4 Hmong farmers and 3 other vegetable farmers, and asked them specific questions regarding the cost of implementing food safety practices on their farm, but did not see their farms in person.

Farmer Interview Results

The following questions were used to determine total costs growers incur when adopting GAPs on their farms.

How many hours per week or month spent monitoring fields?

How many hours per week or month spent on employee training?

How many hours per week or month spent on recordkeeping?

What is the cost and labor hours of improved sanitation and cleaning of facilities?

What is the cost of implementing proper postharvest rinse water sanitation?

What is the cost of increased or modified bathroom & hand-washing facilities?

What is the cost of water & compost testing fees?

What is the cost of fencing and efforts to keep out animals from production fields?

What is the cost of institution of traceability system?

Cost Estimates for Major GAPs Related Cost Categories

The following estimates are based on the costs for a small, 2-3 acre farm with 2-4 employees. The farms where we interviewed varied from 1 to about 100 acres. Only one farm was 100 acres. The others were about 2-5 acres. When estimating costs, we assumed an average size farm in Minnesota, with about 2-5 acres and 3 employees. Many costs are fixed and are not farm size-dependent, such as the cost of renting a port a potty or building a portable handwashing station.

Assumptions: Season is 6 months long, 3 employees, and an average labor dollar equivalent of $9.00/hour.

The cost estimate of roughly $4300 per season is likely higher than most small farms would incur, given that food safety practices in reality are integrated into day-to-day operations and do not mean additional costs as represented here. However, these figures do indicate that small farms may face substantial costs when implementing suggested food safety practices, especially if their current practices are farm from the recommended ones and new systems and practices must be developed. Most notably, the labor associated with implementing proper postharvest sanitation of rinse water (measuring, testing and logging water sanitizer concentrations) and the labor associated with cleaning and sanitizing packingsheds, washing and harvest containers may represent new costs to farmers. Other practices listed here, such as cleaning bathrooms and some packing areas may not mean new or additional costs to farmers. Starting a food safety program on the farm therefore does not require a complete addition of time or resources, but there are likely additional costs that farmers must incur.

Farmers who have implemented food safety plans and the practices listed in this document are encouraged to present their food safety plan to potential customers as a marketing tool, meaning they may acquire new markets or maintain current markets. Food safety audits (GAP audits) are becoming more common, and food service distributors and grocery chains are requiring a food safety audit (costs starting at about $400-$500 for a basic USDA audit). The cost of this audit would be an additional cost to the farmer.

Application of Information

The cost estimates developed through this research will direct outreach efforts to reduce grower’s costs, and to encourage them to adopt the practices that have the greatest “bang for their buck” to reduce microbial contamination. We have developed a list of the most important practices that we recommend farmers start with if they currently have no food safety plan or history or practice with GAPs.

These “biggest bang for the buck” practices include:

Sanitize produce rinse water using bleach or another chemical alternative

Get water tested annually

Do not use raw manure on farm. If you do, use only in the fall.

Check cooler temperatures daily using a digital thermometer, and log these temps on a log sheet

Sanitize all tools and harvest containers weekly or as needed

As a part of the outreach based on this research, a GAPs equipment and resources list (see Appendix B) was posted to the UMN Food safety website for farmers to reference. This page contains links and resources for purchasing items such as traceability labels and guns, used coolers and cold storage, paper towels, thermometers and water sanitizer. The Agricultural Health and Safety team is available to help individual farmers, and continues to lead workshops and develop food safety templates to help growers adopt GAPs on farm.

We also meet individually with growers to provide information on where to obtain water tests, correctly filling out Log sheets, and postharvest and field sanitation.

Limitations

Challenges included gathering accurate data for on-farm food safety practices. Growers indicated that they had difficulty separating the cost of food safety measures from other costs on their farm. For example, the cost for electricity to run a storage cooler from the cost to run the lights in the packing shed. There is one meter for both of these sources, and separating them is difficult. Poor record keeping for purchased items or labor time to accomplish tasks further limited grower’s ability to estimate costs.

This project was funded by a grant from the Minnesota Fruit and Vegetable Growers Association, from the Minnesota Specialty Crop Block Grant Program.